Vodafone Idea has got approval from shareholders for a proposal to raise Rs 20,000 crore through a combination of equity and equity-linked securities, said the telecom company in a market filing.
"An Extraordinary General Meeting of Vodafone Idea Limited was held today, that is, Tuesday, April 2, 2024, at 3.00 p.m. through Video Conferencing (VC) / Other Audio Visual Means (OAVM) in accordance with the relevant circulars issued by the Ministry of Corporate Affairs and the Securities and Exchange Board of India," said the filing.
Vodafone Idea said on February 27 its board had approved raising up to Rs 20,000 crore in equity from promoters and other investors by June, with the aim of bolstering finances for the long-awaited 5G rollout and fortifying its 4G services.
The debt-ridden firm, in which the Indian government holds just over 33 per cent equity stake, intends to secure Rs 45,000 crore via a blend of equity and debt to match the offerings of competitors Jio and Bharti Airtel and potentially curb subscriber attrition.
The capital infusion will equip Vodafone Idea with resources to enhance its competitive stance in the telecom sector, where it trails significantly behind larger rivals Reliance Jio and Bharti Airtel.
Vodafone Idea is grappling with financial challenges, burdened by a debt of Rs 2.1 trillion, quarterly losses, and ongoing subscriber loss.
Despite these hurdles, Vodafone Idea's 4G subscriber base expanded to 125.6 million from 121.6 million a year earlier. The company has sustained growth in its 4G subscriber base and average revenue per user (ARPU) for ten consecutive quarters. Encouraged by improving operational metrics, the company decided to tap into the market for fundraising.In the quarter ended December, the company reduced its consolidated net loss to Rs 6,986 crore, compared to Rs 7,990 crore a year ago, and Rs 8,738 crore in the previous quarter.
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